Adding Spice in 'NoMad'

Tourists jump up as a friend takes their photo near the Flatiron Building.
Mark Abramson for The Wall Street Journal

By

Laura Kusisto

December 2, 2011

After more than a decade of efforts by developers, the charmless triangle at the north of Madison Square Park finally is seeing an influx of cultural and nightlife spots.

Indeed, while many cultural institutions around the city are struggling, the northern end of the Flatiron District is thriving thanks in part to the willingness of landlords in the neighborhood to cut breaks on rent to cultural groups and independent retailers.

"We basically take a long-term interest in the neighborhood as a whole. We're willing with tenants to give them relatively low, fixed rents," said
Andrew Zobler,
chief executive of Sydell Group and developer of the Ace Hotel and the planned NoMad Hotel, both in the area.

ENLARGE

Interest in the area north of Madison Square Park is rising. An art installation on the Flatiron's first floor.
Mark Abramson for The Wall Street Journal

The approach has helped Mr. Zobler attract tenants like Stumptown Coffee Roasters and hip clothing store Opening Ceremony to the Ace Hotel. To offset the lower rent, he takes a percentage of the profits those stores make.

Mr. Zobler is also in talks with Russ and Daughters, a century-old East Village institution, for a space next door to the NoMad Hotel. The deal hasn't closed, he cautioned, but Mr. Zobler notes it is an example of interest in the neighborhood by home-grown New York retailers. The retailer declined to comment.

"Not that many people are reinvesting in that kind of world," said
James Buslik,
a principal at brokerage Adams & Co., referring to theaters and museums. But north of the Flatiron District, "There's real money because the location is so strong," he said.

ENLARGE

The Museum of Mathematics, which claims to be the only museum in the country of its kind, is planning to move into a former showroom at 11. E. 26th St.

Co-founders
Glen Whitney
and
Cindy Lawrence
said they looked for locations in SoHo, Chinatown, Times Square and Bryant Park. "We looked in the Meatpacking District, and by the end of the week the landlord had doubled the rent," Ms. Lawrence said.

In addition to the access to transportation and growing population of families, the proximity to the Flatiron Building offered a quirky bit of symbolism for the new Museum of Mathematics: "It's the most photographed angle in New York," Mr. Whitney, the museum's director, pointed out.

The landlord had originally eyed a restaurant, according to Mr. Buslik, the broker, but struggled to find a restaurant willing to take on the large 18,000-square-foot space.

ENLARGE

"How many people are going to build a new restaurant and spend $10 million?" during a recession, he noted.

The museum will join one of the few other museums now in the area, the Museum of Sex on Fifth Avenue and 27th Street, which opened about nine years ago.

For the area lately dubbed "NoMad,"wedged between gentrifying Chelsea to the west and the Flatiron District to the south, it has been a long journey to respectability.

ENLARGE

The Hog Pit bar, a recent arrival from the Meatpacking District.
Mark Abramson for The Wall Street Journal

"The district had never gentrified because it was essentially the capital for wholesale or bootleg merchandise. Bootleggers would pay higher rents than anyone else, so it stubbornly remained a counterfeit marketplace," said Mr. Zobler.

While Sixth and Fifth avenues are now dominated by residential high-rises, he hopes to fill the middle ground with restaurants and retailers to service those new residents.

"We see the Broadway corridor as becoming the main shopping street and living room for all of the people that live in the neighborhood," Mr. Zobler said.

That might already be starting to come true, as a number of lively restaurants and bars, such as the Hog Pit, San Rocco, Gstaad, Nuela and, of course, Eataly, have already opened.

Jay Z's 40/40 Club, which for nearly a decade has been one of the lone bars in the immediate area, is also undergoing a multimillion-dollar expansion to 13,500 square feet.

A new 10,000-square-foot theater overseen by former "Saturday Night Live" writer
Ali Farahnakian
also recently opened at 121 E. 24th St.

The People's Improv Theater moved from a previous location on West 29th Street, where it had been for eight years. The rent for the new place is about $60-per-foot for the street level—about $20 lower than a theater space on Broadway can command.

Still, Mr. Farahnakian notes that despite a sympathetic landlord, it is becoming increasingly difficult for cultural institutions to afford rents in the area. The theater opened a coffee shop and bar to help bring in some extra money.

"Our rent increased four-fold. My Con Ed bill is what my rent was at the old space," he said.

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